Bank of America (BAC) shares slipped 0.25%. The bank announced that it has reached a $10 billion settlement with Fannie Mae to resolve agency mortgage repurchase claims on loans originated and sold directly to Fannie Mae through Dec. 31, 2008.

Nationstar Mortgage (NSM) shares surged by 16.9% after the company announced it is buying about $215 billion in mortgage servicing assets from Bank of America.

Volumes were at 3.27 billion shares on the New York Stock Exchange and 1.69 billion shares on the Nasdaq. Decliners were outpacing advancers 1.2-to-1 on the Big Board and 1.3-to-1 on the Nasdaq.

"With the beginning of earnings season this week, investors will be looking closely at company commentary in light of the recent fiscal cliff crisis and the upcoming debt ceiling fight," said Mike Simmons, managing director and partner at HighTower's Simmons Wilkes Investment Advisors. "The debt ceiling debate will be one of the major determinants of market performance in coming weeks."

On Friday, major U.S. stock averages ticked higher after upbeat December jobs and services-sector growth reports.

The U.S. macro calendar will be relatively light this week. However, Federal Reserve officials are expected to make a number of speeches. Bank of America economists expect the doves to reiterate a need for additional accommodation amid a subpar recovery.

Rocky White, senior quantitative analyst at Schaeffer's Investment Research, said to pay attention to how the market performs this month because January is a good indicator for the calendar year.

"If the Dow is up 3.5% or more in January, the rest of the year averages a gain of 11.15%," said White. "If the Dow loses at least 3.5% in January, it averages a gain of just 0.32%."